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MIRET

Changing the future of footwear with MIRET bio-based sneakers

Introduction

MIRET is developing environmentally advanced footwear that are designed to have the lowest possible impact on the environment.

Our bio-based sneakers are an alternative to highly unsustainable products, without compromising on design, durability, or comfort.

MIRET is based in Croatia and was established in 2018. We are raising between €400,000 and €560,000 to achieve scaling through growing the direct-to-consumer and business-to-business sales.

Our mission is to raise awareness of the negative ecological impact of the footwear industry and empower people to choose sustainability. Miret is not just a sneaker – it is a vehicle for change.

Our dream is to create a “zero-impact” shoe: compostable, recyclable, made from renewable, bio-based, sustainably grown materials, locally sourced, locally manufactured, and extremely durable. Our main target is to reduce the use of petroleum derivatives and toxic chemicals in material production processes and in the final product.

Problem

24 billion pairs of shoes were made just in 2019. Made mostly from oil derivatives and leather, shoes have a detrimental effect on the environment. Here are some the facts about the environmental impact of the footwear industry:

Solution

MIRET ecological sneakers – crafted from bio-based materials*, with the strongest natural fibres and natural wool.

Bio-based materials are wholly or partly derived from materials of biological origin, excluding materials originating from geological formations and/or fossilised

MIRET aims to reduce the negative eco-impact of the footwear industry by offering a viable, aesthetically pleasing, and cost-efficient alternative to sneakers made from oil derivatives or leather. Through our product, we satisfy the needs of people who look for shoes that fit their green lifestyle without compromising for style or comfort. Developed with new technologies and modern bio-based materials (as shown in the diagram above), our sneakers substitute the classical approach, and we believe outperform in comfort.

Through the MIRET project, we are tackling UN Sustainable Development goal 12 (Ensure sustainable consumption and production patterns), goal 13 (Take urgent action to combat climate change and its impacts), and goal 14 (Conserve and sustainably use the oceans, seas and marine resources for sustainable development). We use DPD for all our logistics who has a CO2 neutral delivery policy across Europe.

Market

In 2020, the global market for footwear was around US$ 365 billion, which is expected to grow to US$ 530 billion by 2027. The global sustainable footwear market is expected to grow to US$ 11.8 billion by 2027, with an aggregated annual growth rate of 5.8% from 2020 to 2027.

The target group for MIRET are millennials and the Z-generation, who we believe are willing to spend more on sustainable products.

Footwear is the second most important fashion segment within the retail business, just behind apparel. According to the “Forecast World Fashion Industry 2019 study” conducted by Lineapelle Economic Department, the Z Generation made up for 40% of world consumption in 2020. 66% of Millennials and the Z Generation are willing to pay more for sustainable products. 90% of the Z Generation believe that companies have the responsibility to tackle social and environmental issues, while over half of millennials already declare to look for information about sustainability of companies and products before buying.

Our primary market consists of ecologically conscious individuals of middle and high income. Targeted customers actively buy online. Our primary target market is the EU, and the secondary markets are North America and Asia-Pacific. Exports to foreign markets already make up for more than 65% of our sales.

Our target markets primarily focuses on customers with a high level of ecological awareness, coupled with a high disposable income.

Sales model

MIRET’s sales model is Direct-to-Consumer (D2C) via e-commerce.

We aim to expand to fashion marketplaces where bio-based materials are the sole focus – such as the German platform, Avocado – along with planned Business-to-Business (B2B) collaborations with other brands.

Business model

Our bio-based materials are sustainably supplied by DPD from the EU, with packaging materials (boxes, packing paper) from Croatia. MIRET sneakers are produced in Croatia from factories in Koprivnica and Virovitica. The production process consists of four stages: cutting, stitching, assembly, and packaging.

Based on the test results conducted by “OWS nv” Belgium (an accredited laboratory for conducting Bio-based Carbon Content as described by the European norm EN 16640 Bio-based products), MIRET sneakers have a minimum of 70% bio-based carbon content – making them eligible for OK Biobased certification with a three star rating: which requires more than 60% biobased materials (the tested materials represents 72.6% of the weight of the sneaker). We have started the process to officially gain the OK-Biobased certification.

Traction

MIRET launched on Kickstarter in March 2020, which was a success.

We take great pride that we managed to successfully produce and deliver our orders to our backers on time, while during the first wave of the global Covid-19 pandemic.

Miret Kickstarter campaign facts and figures (please note the raise is in US dollars):

In 2021, we made the transition from Kickstarter to the regular market and launched our first commercial collection called the “Poems for the Island” in April 2021.

Miret key metrics for Q1-Q3 2021 – we sold 1,205 pairs to 63 countries.

Historical Performance from our Annual Reports (please note the revenue, expenses and profit below are in Euros, converted as of November at an exchange rate of 0.13 Euro to Croatian Kuna):

Team

Brothers Hrvoje and Domagoj Boljar are the co-founders of Miret.

Hrvoje Boljar has 10 years of experience as head of footwear design and development in Roosvai’s footwear factory and holds a master’s degree from the University of Zagreb in industrial design, Hrvoje has extensive knowledge of footwear development and sustainable materials sourcing. He has worked as a designer and a product development director.

Domagoj Boljar has over 11 years of experience as a CEO of the Roosvai footwear factories in Croatia, along with working at Mr Joseph and Lessinia. This experience brought extensive knowledge of running a mid-scale business. Together they developed and produced high-end luxury sneakers.

The MIRET team consists of an additional 6 members, who all share the same sustainability values and vision as their founders:

Ana Boljar – creative director
Marina Ravlić – marketing manager
Mikael Hietala – sustainability officer
Alka Uroda – business development manager
Klara Markotić – social media manager
Dinka Hadžović – administration and customer care

MIRET is supported by a strong and diverse team of advisors who cover finance, international trade, e-commerce, online advertising, sustainability and startup funding.

Competition

Unique Value Proposition
The high use of natural materials is what distinguishes MIRET sneakers from competitors, with a focus on non-toxicity and sustainability.

Direct Competition
Our direct competitors include companies and brands that also focus on eco-friendly and sustainable footwear:

  • “Allbirds” focus on the reduction of CO2 emissions per pair and maintain the comfort of the show. Their USP focuses on being the world’s most comfortable running sneakers
  • “VEJA” focus on ethical manufacturing and aesthetics. Their USP is a highly ethical and transparent manufacturing process – blending design with social responsibility
  • “Vivobarefoot” USP is to create barefoot footwear. Recently they have incorporated recycled and other eco-friendly materials to promote themselves as sustainable

Indirect Competition
MIRET’s indirect competition are some global sports and leisure footwear brands, which are implementing sustainability approaches through special projects and collaborations, such as the following:

  • Nike (Nike Space Hippie)
  • Adidas (Adidas & Parley, Adidas & Allbirds)
  • Reebok (Forever Floatride Grow)

Capital

We are raising funds for scaling by growing our D2C and B2B sales.

So far, MIRET has raised €423,000 through a combination of private equity, debt instruments and grants. Below summarises our previous funding rounds:

Through 2018 and 2019, MIRET focused on product development of the first generation of MIRET ecological sneakers.

Our first external funding came in 2019 in the form of an EIT Climate-KIC Accelerator Grant and from early investment via venture capitalists. The funds were used to complete the product development and prepare the Kickstarter campaign.

In late 2020, we raised our seed round. We focused on business development and preparations for the next phase: scaling up. Most of the funds were used for testing the product-market fit, gathering feedback on the product, and measuring KPIs.

In 2022 we plan to accomplish the following:

  • Finish development of MIRET’s women’s specific eco sneakers and MIRET’s bio-based summer sandals and bring them to the market
  • Introduce customisable sneakers (eco printing on fabric) and realise at least two B2B collaboration projects with this product
  • From February to April, we plan to do the first production run of 5 000 pairs of sneakers for the Spring-summer 2022 selling season
  • MIRET is accepted into a subsidised pilot program by Oeko-tex, and we plan to finish the certification program by February 2022. We are in the process of a CO2 footprint and lifecycle analysis and gaining the OK biobased certification, both planned to be finished by April 2022
  • MIRET was accepted into the Avocado store (a sustainability fashion marketplace, targeting consumers in the DACH region)

We plan to use the minimum investment of €400,000 (or maximum of €560,000) for the following:

  • Growth cost – 57.5 %
  • Employees costs – 17.5 %
  • Research & development – 7.5 %
  • Certifications and IP – 7.5 %
  • Other costs – 10 %

Exit

Mergers and acquisitions are common in the fashion industry. The most likely exit scenarios are as follows:

  • Acquisition by a competitor, strategic partner or a B2B client from the industry
  • IPO
  • Share Buyback of Funderbeam syndicate share by MIRET

Risk

Investment in early-stage companies involves certain risks. A prospective investor should carefully review all the information contained in this investment offer overview, including risk factors identified below. Businesses in competitive markets such as ours may be subject to risks foremost connected to large competitors and, in our case, to the success of our attempt to carve out a niche sub-market for sustainable footwear.

We believe the main risks that could affect our business goals to be the following:

Raw materials supply risk

Global supply and logistics shocks can negatively impact our company. Our supply chain is based in the EU and the final shoe production is done locally in Croatia. Still, supply problems might arise. Availability and cost of raw materials is affected by world market prices that can move in unfavourable direction. Cost increases or raw material availability may impact our ability to purchase materials at favourable prices that may affect our pricing or margins.

Risks related to entry into new foreign markets

We may not have sufficient ability to enter new and untested foreign regions, which in consequence may result in significant cash burn with limited results that would severely impact our growth.

Market and competition risk

Our competitors’ actions may negatively impact our business growth if more companies decide to create similar natural material products. Competitors include athletic and leisure footwear companies and athletic and leisure apparel companies.
Many of our competitors are larger than us – with strong worldwide brand recognition – who therefore have substantially greater resources. Fashion and footwear are highly competitive markets that can potentially limit our growth.

Sustainable fashion is fast growing and eCommerce has made it easier for new companies to enter the market in which we compete, leading to new competition in the footwear and apparel industry.

Marketing, brand, and product positioning risk

These risks include positioning of our product in a wrong segment, the price level not being optimal for success, and our marketing efforts may not deliver our desired consumer uptake, all of which could lead to us falling short of our target revenues. If there is a significant shift in consumer trends, or we are unsuccessful in adapting to our client’s interests, our products might lose traction on the market, thus impacting our growth.

Liquidity and financing risk

We anticipate the need for future funding to sustain targeted growth in the long term. If we are unable to secure this, we may fall behind our competitors. We believe that this would not lead to us shutting down the business, but it would likely impact our long-term position in the market.

Global economic and trade risk

The global economy has been unstable due to the emergence of Covid-19 and global supply chain issues. It is difficult to predict the impact that these externalities might have over an extended period. Therefore, it is possible that such a scenario may have an impact on our business in some shape or form.

Other

Awards and Recognitions

MIRET won the Gold Award in the category of Sustainable Fashion at the 14th IDA Awards – The International Design Awards 2020.

MIRET was also awarded by the Global Footwear Awards, in the category of Materials sourcing/Biodegradable materials, showing that we are the forerunners in the niche of sustainable footwear. We won 1st place in the overall category for Material sourcing, and won two medals – gold and silver. For this occasion, Hrvoje Boljar, co-founder and chief product designer at MIRET, talked about the project.

Recently, the International Trade Council announced its winners in the 2021 Go Global award ceremony, and we are proud to share that MIRET won 1st place in the category “Socially Responsible Exporter of the Year”.

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